A Nervous Start to November as Markets Face Rates, Elections and Rising Tensions
Welcome to November! I hope you had a tremendous weekend, we had some excellent weather on Saturday which was enough to get me out in the garden, once again clearing what seems like and endless supply of leaves. I did miss the F1 grand prix which sounded pretty hectic but gave Kimi Antonelli the points he needed to become the youngest every drivers champion at the age of 20 and a couple of months. Ferrari driver Hamilton wasn’t impressed with his team mate, Leclerc, whose first-lap antics could well have dented Ferrari’s chances for a double podium finish.
In football, Spurs beat Palace to take them to eighth in the table having been bottom of the league a few games ago. Man Utd, now 17th in the table, seem to be replacing Spurs as the big club with major issues although I did see their loss to Chelsea and they did have plenty of chances to score were it not for some pretty bad finishing. Arsenal put their midweek loss to Fleetwood behind them as they beat Liverpool to go top of the table although the Anfield faithful will feel rightly aggrieved that they were not awarded a penalty.
Last week ended with a bit of a bloodbath in stocks led by losses in tech stocks and we’ve seen a renewal of US dollar weakness that has taken GBPUSD and EURUSD to 1.3425 and 1.1210 this morning, GBPEUR hit 1.2015 on Friday but has since slipped back to 1.1980. We have the BoE rate announcement later this week where talk is of a 25bps rise to 4% although perhaps accompanied by a signal that this is not the start of a tightening cycle. In the crosses, GBP is currently 1.9120, 2.3835 and 1.8750 against AUD, NZD and CAD, the latter barely changed despite suggestions from Trump that US and Canada are near a trade agreement.
Things in Europe aren’t good. Fitch has put France ratings on negative watch, while reports over the weekend of violent protests and looting in Germany following recent similar protests in France. In other news, it seems that Germany will go into winter with less gas in storage than it planned, prompting fears of higher prices. There are reports Europe could buy Russian gas across Ukrainian pipelines through US intermediaries which would bypass sanctions.
This week brings the US midterms, a pretty big event in themselves but more so because it is possible US will resume military strikes against Iran after the elections. Iran has warned that it will retaliate if it is attacked and look at a wider range of targets that could see an escalation of war in the region. Oil prices are some $5 off Friday’s highs as I type, helped by reports that Trump is still seeking a diplomatic solution. Meanwhile Ukraine and Russia each say they have been hit by hackers who sent false warnings of nuclear and chemical attacks to emergency alert apps. No one has taken responsibility for the messages.
Gold price slipped through $3,900 to hit their lowest level since Sept 2025 which goes against what many would look for with more Middle East war talk. I have my eye on gold price against Euro (XAUEUR) which is trading around EUR 3,475, a level that has supported and held several times over the past year. A break below could well be significant for technical traders.
Option expiries and US economic releases are back to normal times after the US clock changes at the weekend. US ISM PMI’s on the calendar today while overnight we’ll have the latest rate decision from the RBA who are widely expected to lift rates 25bps to 4.85%. This week also brings EU inflation and retail sales and various US employment data that concludes with the nonfarm payrolls on Friday. What with that and the midterms elections, it could be another busy one.
Have a great day…
- 10.00 ECBs Vujcic speaks
- 12.00 ECBs Nagel speaks
- 14.30 CAD S&P manufacturing PMI
- 15.00 US ISM manufacturing PMI
- 16.15 Feds Goolsbee speaks
- 21.45 NZ building permits
- 03.30 RBA rate announcement
- 04.30 RBA press conference